The patient-centered medical home (PCMH) model evolved to address the urgent need for primary care delivery systems that could produce better care coordination, improve health outcomes, and could control resource use and costs. Implementing a medical home usually requires a whole-practice redesign that promotes 1) access to, continuity, comprehensiveness, and coordination of care; 2) the chronic-care model; 3) sophisticated information technology; and 4) reimbursement incentives that facilitate better patient access and outcomes. Many healthcare systems have embraced the PCMH model enthusiastically, and early evaluations suggest measurable successes. However, significant knowledge gaps still remain in our understanding of the true costs, both direct and indirect, that an individual healthcare clinic or group of clinics incurs during the implementation and maintenance phases of a PCMH-model implementation. Since 2006, CareOregon, a Portland, Oregon-based nonprofit Medicaid managed-care plan, has worked with select practices that provide primary care to its members to implement a medical-home program called Primary Care Renewal (PCR). PCR provides reimbursement and other support to encourage practices to provide multidisciplinary, coordinated, and comprehensive care. Participating practices agreed to establish team- based and customer-driven care, barrier-free access, proactive panel health improvement, and onsite or otherwise integrated behavioral health services. CareOregon has since extended its PCR work by organizing the Patient and Population Centered Primary Care (PC3) curriculum, which is essentially a training program to allow clinics interested in PCMH implementation to explore the PCR experience. Various medical systems throughout western Oregon now participate in the PC3 learning collaborative. Our study uses process- improvement theory as a framework to apply costing methodology and qualitative research methods to the identification, categorization, and quantification of the direct and indirect costs of successful PCMH practice transformation. This information will be extremely useful for clinics exploring PCMH transformation, at the PC3 collaborative and elsewhere. We will combine structural information with budget and other financial data to develop an activity-based cost model for PCMH transformation. We will review our model and results with key informants at selected PC3 clinics.